The comments coming from the Crypto currency Industry observers post the Senate Hearing is all of a positive tone. Some say that the outcome is a ‘sigh of relief’ while some say it is ‘bullish’. The much-anticipated meeting which was held yesterday by the Senate Committee on Banking, Housing, and Urban Affairs, had discussed lawmaker’s conduct and consideration on cryptocurrency regulation. A wave of respite for crypto holders was observed after major banks curtailed their customers from buying bitcoins using their credit cards and governments across the world were cracking down cryptocurrencies and its businesses.
The hearing committee was one of the biggest in its positioning and was highly anticipated. The Heads of the Commodity Futures Trading Commission (CFTC), Christopher Giancarlo, and the Securities and Exchange Commission (SEC), Jay Clayton, presented their testimonials and discussed on a wide range of topics inclusive of regulatory concerns around Initial Coin Offerings (ICOs), and not excluding market oversight and price volatility of the cryptocurrencies. While the discussion was about the potential dangers of the virtual currencies for investors, the outcome of the meeting was not that dangerous after all for these investors.
The Industry experts and observers are particularly happy about the measured approach and sophisticated nature of the interchange and duologue of the CFTC and SEC heads. An attorney working for a Washington D.C. based law firm, Mr. Stephen Palley commented that he was very impressed with the knowledge that both the committee members and the regulators possessed about cryptocurrencies which is a very complex and cryptic topic! As quoted, Palley said, “It’s amazing that nine years after the Satoshi white paper, you’ve got senators talking about this shit and not pooh-poohing it.”
Commodity Futures Trading Commission
The CFTC head, Mr. Giancarlo presented in his testimonial that, “We owe it to this new generation to respect their enthusiasm for virtual currencies, with a thoughtful and balanced response, and not a dismissive one.” He struck out that bitcoin was any different from blockchain. This was a positive tone for the investor’s post-JPMorgan Chase Bank’s CEO, Mr. Jamie Dimon’s earlier comment calling Bitcoin as fraud and the Blockchain to be real.
Attorney Zoe Dolan took to Twitter and optimistically posted after the hearing that, “this hearing has made me so bullish I can hardly stand it.” Also as quoted to a website on blockchain news, she added in support of the wake for regulations, “As a lawyer – and a criminal defense lawyer in particular – I was heartened to hear acknowledgment that existing laws suffice to address age-old human conduct. Fraud is Fraud.”
Berger Singerman LLP partner Andrew Hinkes also expressed his admission on the requirement of more resources and regulations to keep a check on a rapidly growing industry. “Although this may strike fear in the community, more resources may lead to better, more thoughtful and more facilitative regulation. Regulation is helpful when it provides useful guidance,” he quoted.
Regulatory Affairs Need More Clarity
Apart from being happy and optimistic about the hearing, the market observers needed more clarity on the regulatory front too. They believed the talks led to a requirement for a clearer understanding of the regulations which can be enforced anytime now. The CFTC and SEC head’s having indicated the same thing with possible action from the U.S. Congressmen. Clayton’s remarks according to Carol van Cleef, an expert Washington banking lawyer pointed at a “need for clearer jurisdictional lines.” According to her, Clayton “kept talking about the patchwork system” and that “SEC is in regular talks with CFTC and Federal Reserve,” which clearly implied the need of the hour to be clear-cut instructions around the regulatory lines.
The new set of regulations which are still not clear and under more discussion as highlighted above might lead to problems for crypto businesses, such as bitcoin exchanges. These have given a lot of time and effort in building compliance and regulatory guidelines for their businesses according to the current framework of money services businesses and money transmitters licensed by the states. The efforts involved in changing the current scenario of compliant guidelines will be extensive and quite vast!
The Big Picture Is Yet to Come
The bigger picture yet remains to come out. It seems the lawmakers and regulators agree of the fact that the Cryptocurrencies are to stay aside the risks involved. According to observers, this highlighted during the hearing was a cause for celebrations. It certainly shows that the Senate was not opposed to a future with cryptos. Both Giancarlo and Clayton pinnacled on the uses and advantages of the tech. The CFTC head particularly made the crypto-community buoyant with his comment, “If there were no bitcoin, there would be no Distributed Ledger Technology.” His comment received support from several other senators attending the meeting as well. Also adding on to the same note, Mr. Clayton stated that“I hope people pursue it (Distributed Ledger Technology) vigorously.”
Giancarlo, in fact, pointed out that the distributed ledger technology had made it possible to identify the owners of mortgages post the 2008 major financial crisis in the U.S. He also highlighted that “Sixty-six million tons of American soybeans were just handled through a blockchain transaction by the Dreyfus Company to China. So, Bitcoin is now being used, it’s being used in our American transportation and logistics system.” He confessed that his niece was a cryptocurrency holder. Also concerned over the realization of cryptocurrencies as an extraordinary powerhouse with good potential by people all over he said, “I think this distributed ledger technology has enormous potential. Now how it will be realized, when it will be realized are challenges, and those we can’t say.” Such statements from him greatly boosted the morale of crypto investors and of course pointed at cryptocurrencies to be the next big thing after the internet, and smartphones.
The executive director of Coin Center, Jerry Brito said post the hearing, “Senators and regulators are certainly concerned about fraud and volatile markets in cryptocurrency, but it was clear from today’s hearing that they also understand, as Senator Warner suggested, that it may be as transformational as mobile telephony.”
The key takeaway of this hearing is that the law and policy makers of U.S. understand the technology and its advantages and have a will to curb the disadvantages of responsible regulation and its enforcement.
Bitcoin fans were elated post the hearing and many took to Twitter to beam about it. A fan quoted on Twitter, “The anxiety that lifted from my being in that moment felt blissful,” while another fan posted, “Ok, that’s it, the Chairman of the US Commodity Futures Trading Commission just described “HODL” and how it fascinates him. If that isn’t an indicator that crypto is here to stay, then I don’t know what is?”
What lies in the Future
The future of the Cryptocurrencies is full of questions waiting for their answers. With all the positive things quoted by the hearing committee, it still does not ensure that the crypto markets would be smooth for its investors. With scammers and ransomware targeting the industry and bitcoin investors, with some criminals even trying to kidnap investors for ransom, the future ahead definitely does not look easy or rosy for that matter! “We intend to be very aggressive, if nothing else, so that people like my niece can have some security that there aren’t fraudsters and manipulators out there – and there are a lot, too many, far too many of them,” Giancarlo said.
Avid Crypto Market followers would definitely be interested in knowing what actions are planned by the Congress and Regulators for Cryptocurrencies. The SEC head has specified that agencies would approach lawmakers in the near future to ask for powerful and sophisticated tools helpful in overseeing of the cryptocurrencies. Clayton also made it clear that Gatekeepers, Lawyers, and Accountants would be subjective to SEC Jurisdiction. This reiterates the point that the regulatory actions coming up against such professionals would be stringent. Also, the SEC head’s testifying the patchwork of rules indicates that additional& critical steps will be taken forward in that direction in the coming months.
Perianne Boring from a D.C.-based trade organization called the Chamber of Digital Commerce thought of the patchwork system to be in a positive direction. “We are encouraged that the SEC and CFTC are working with others to address the patchwork of regulation that suppresses growth and consumer choice, and provide a runaway for the U.S. to retain its leadership in technological innovation,” she quoted to a website on an email.
Commodity Futures Trading Commission (CFTC), and the Securities and Exchange Commission (SEC) have geared up now to make way for tight laws against bad actors in the crypto field. This calls for the attention of Innovators in the blockchain technological space or millionaires in the ICO space. Such people ought to abide by the laws or be called bad actors. Though there is uncertainty surrounding the regulations coming up, one thing is for certain that they have all the push required to be coming out soon!
